Ordinary Australians would pay a $15 upfront fee to visit a doctor and medium- to high-income earners would be forced off Medicare altogether under sweeping changes advocated by Tony Abbott's hand-picked National Commission of Audit report that was released on Thursday.

The radical measures are just some of the changes proposed in a hardline economic blueprint aimed at rescuing a budget that both the government and the commission argue is otherwise locked on a path to permanent deficits.

Illustration: Ron Tandberg.

New mutual obligation rules would force some unemployed to move to areas of greater employment prospects or lose the dole, and new means tests would see the family home factored in to the age pension eligibility for the first time, requiring prospective retirees to sell or face a lower standard of living.

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Welfare payments would be tightened across the board with eligibility and indexation rates adjusted to reduce costs and, in the case of the Family Tax Benefit part B, scrapped altogether.

Other recommendations include:

- Abolishing annual minimum wage cases – though not the minimum wage itself – and setting a new benchmark of 44 per cent of average weekly earnings

- Requiring unemployed people between 22 and 30 to move to areas of higher employment after one year or surrender the dole

- Increasing the Medicare levy surchage to 3 per cent to 3.5 per cent for high-income earners without private health cover.

Carers, people on the disability support pension and other forms of assistance would also face changes that would see the rate of increase slowed.

The report that the Treasurer Joe Hockey insists is "not the budget" was nonetheless released following a budget-style lock-up for journalists in Canberra, adding to confusion about what measures will find official favour in the budget and what will not.

In a cryptic performance intended to give nothing away, he said the report demonstrated that the government simply could not continue to spend more than it raised.

''It is one important input to the government's considerations for the upcoming budget. While the government will not be providing an immediate response to each recommendation, our response to the National Commission of Audit report will be our first budget 13 May,'' he said.

The commission forecasts much of the growth in spending that will occur in 15 key areas, which will account for 70 per cent of the total growth in spending over this period.

Mr Hockey said the coming budget would be a ''call to arms for the Australian people''.

"If you have the capacity to work, we don't just want you to work, we need you to work."

Commission of audit chairman Tony Shepherd said the changes were merely advice to government but he acknowledged that the recommendations were designed to give the government the kind of policy fixes it was seeking.

"We've answered a simple arithmetic equation," he said of the overall savings task.

Pre-budget speculation has focused on a possible $6 co-payment for GP visits but the commission of audit has advocated a co-payment of nearly three times that at $15 – although less for concession card holders.

Mr Shepherd said that idea stemmed from a view that the system was being abused as Australians were visiting their GP an average of 11 times a year.

"Something that's free is not valued; this will give people pause to think, 'Will I go or not?'

"I just don't think Australians are that crook," he said.

The report comes as the government continues to send out mixed messages over a proposed deficit tax – a 1 per cent and 2 per cent loading respectively on the two highest income tax brackets aimed at raising about $10 billion over the next four years.

Also under consideration is a plan to claw back some of the $5.5 billion surrendered to farmers and the mining sector through the 38 cent diesel fuel rebate.

That prompted Liberal senator Cory Bernardi to break ranks by lashing his own party for what would be an "appalling" breach of faith.

"We went to an election promising no new taxes, no excuse, and no surprises; well, there certainly have been a few surprises already this week," he said.

He raised the concept of sovereign risk, arguing that investment decisions in mining and agricultural ventures had been based on the existing cost structure regarding fuel.

The brash comments are representative of a hostile mood in the Coalition party room over the proposed deficits tax and the Prime Minister's paid parental leave scheme.

The gold-plated plan has few enthusiasts and even the commission of audit savaged it, proposing instead that the already scaled back $100,000 maximum annual salary replacement for six months be replaced with average weekly earnings of $57,460. It wants the savings directed to childcare as a productivity enhancing measure.

The government now finds itself balancing an even more difficult public relations task leading into the budget with "courageous" commission of audit ideas, such as giving taxing powers back to the states, being privately scoffed at by ministers but officially not ruled out before the budget.

Older Australians, the majority of whom supported the Coalition at the last election, would be among the hardest hit under the commission of audit approach, as benchmark payments in the age pension are gradually reduced over time to 28 per cent of average weekly earnings.

316 comments

It was always going to be the case. The Liberals HATE Medicare and this was a Liberal audit.Anyway, this is all just Tony & Ruperts PR exercise to soften up the electorate so when the actual budget is released next week Tony & Joe look like they are trying to soften the blow.

Commenter

Scotty

Date and time

May 02, 2014, 5:35AM

It just goes to show you can't even raise or debate any ideas without the lefties going into a frenzy. No mature discussion or analysing proposals on their merits, just a whole heap of whinging and moaning.

We all knew that tough decisions would have to be made, the last Labor budget was considered "responsible" and voters gave it the tick of approval. I'm expecting the Coalition to also deliver a "responsible" budget.

Commenter

adrian

Date and time

May 02, 2014, 6:56AM

The ACTU needs to mobilise people your rights at work style. It is not enough to verbally criticise, we need feet on the street and loud, sustained and critical opposition to the biggest swindle of wealth from the bottom end of town in recent Australian history. There is power in a union, let's actually use it instead of looking like stunned mullets or talking about far off elections.

Commenter

Homage to Catalonia

Date and time

May 02, 2014, 7:13AM

The most important recommendation is the one that Tony will not take on - cutting his crazy PPL to $57k.The Greens and Labor really need to take him to task on this one as it is his signature policy. As the Liberals always say, if you can't afford something then you shouldn't have it.

Commenter

Scotty

Date and time

May 02, 2014, 7:15AM

At least the rich miners, global corporations, car leasers, rich superannuants and rich pregnant women are safe from all this. I am so relieved.

Commenter

GOV

Location

Sydney

Date and time

May 02, 2014, 7:41AM

Folks, as has been mentioned before by others, these are recommendations. Lets wait for the budget. That said, I can't help but feel this is a smoke and mirror show, to get the public wound up before the budget. The question you have to ask yourself is why ? ...

Commenter

Keep Calm, but be wary

Location

Sydney

Date and time

May 02, 2014, 7:48AM

I am not an Abbott supporter, but I do think that we need a bi-partisan (tri-partisan?) approach to looking at structural issue in Commonwealth Revenue and Commonwealth Spending. We are clearly in structural deficit (by approx. 2.8% of GDP per year), and have been on the path to that from the vote-buying Howard years and through continuation and extension of that in the Rudd/Gillard years. Unfortunately, political ideology of the main parties obfuscates the fact that we need to raise revenues and/or reduce spending. Where and how is a political debate that should be had, but only after we get broad consensus on the need to eliminate the structural deficit. I have no problems with short-term or even mid-term deficits to stimulate or protect the economy (eg at time of GFC)....but structural deficits are just plain stupid. We know that Abbott as opposition leader would never have allowed a constructive debate on this...my guess is that Shorten will use the same playbook. Just desserts for Abbott, but the nation needs statesmen-like behaviour from both sides at the same time.

Commenter

Lazarus

Location

Brisbane

Date and time

May 02, 2014, 7:48AM

it seems Labour got us here - we need Bill Shorten to say sorry for the massive debt he and his party have gifted the Australian people. What hypocrisy for Bowen and Shorten to blame Abbott! they should hang their heads in shame for the shambled mess they left behind

Commenter

Tabitha

Location

melb.

Date and time

May 02, 2014, 7:50AM

The audit's terms of reference as spelt out this morning by Tony Shepherd was limited to expenditure not revenue so they only looked at what government spends. Because the middle and lower class is the most widely represented in the community this is the largest in terms of expenditure. Individually however these are the lowest in terms of expenditure. The audit did not look at the one of the lowest collective groups of pensions but one of the highest individual pensions, the politician's pensions. Politician's don't get superannuation from government. They get a a taxpayer funded pension. These should have been looked at because individually they are one of the highest expenses of government Mr Shepherd wants lower to middle income earners houses to be means tested for a pension. Individually these people earn much less than politician who will be exempt from pensions being reduced, having their family homes means tested and having to wait until 70 for their taxpayer funded pension. Each halving of an inflated taxpayer pension to a politician will pay three welfare recipients who desperately need it. The Age of Entitlement is over. For politicians. The Politicians whose election material includes reducing their salaries and pensions gets my first and second votes. Why were they exempt from this expenditure audit?

Commenter

Politicans Audited First

Location

Melbourne

Date and time

May 02, 2014, 8:00AM

A tax on a Doctor is such a ludicrously insensitive and selfish approach you wonder how Liberals and big business sleep at night. I was at the Doctor's yesterday. I was surrounded by people who were sick. They had foot, ankle, knee, hip problems. These were people in their 50s and 60s who work. There were young kids, there were women. These people were all suffering. They weren't these mythical people Tony Shepherd banged on about and no they aren't at the Doctor's eleven times a year. few are. He said "the average" is 11 times a year so he means all 23 million people avarage 11 visits. That's 253 million Doctor visits. That means for the ones who go every six months like me, there must be others going 9 times more or 81 visits per annum. That is rubbish. Absolute rubbish. We all must remember that Tony Shepherd is head of the business council and is former head of Transfield Services, a company with hundreds of million of dollars in government contracts. He is not government.

1 May
High income earners would be forced to take out private health cover, compulsory fees would be introduced for visiting the doctor and insurers would be allowed to charge smokers higher premiums under a radical prescription for health reform delivered by the Commission of Audit.

1 May
The roll-out of the national disability insurance scheme should be slowed because the timetable puts its financial sustainability is at risk under the current timetable, the National Commission of Audit has recommended.

2 May
The commission's most disruptive recommendation is based on the idea that competitive federalism is superior to cooperative federalism. In theory, it should be. Unfortunately, like communism, it just doesn't work as the ideologues believe. It ends up causing a greater mess.

1 May
Tony Abbott is about to vanish in a puff of existential meaninglessness. Sorry if that sounds heavy, but it seems an inevitable consequence on budget night if he goes ahead with this debt levy proposal. “No new taxes” he boomed in the throes of his anti-Carbon Tax blitz before adding ecstatically: “this is my whole reason for being in politics”.

1 May
The 86 recommendations in the National Commission of Audit report can be broadly divided into three categories – those likely to be adopted, those that will be adopted in part, and those that would, as Treasurer Joe Hockey acknowledged in a nod to Yes, Minister, require a considerable dollop of "political courage".

1 May
The Abbott government's Commission of Audit has recommended sweeping changes to education policy including winding back the Commonwealth's responsibilities for schools, abolishing all Commonwealth vocational education programs and making university students contribute a greater share of their education costs.